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If an Economy Described by the Production Function Y = K\sqrt { K }

Question 290

Multiple Choice

If an economy described by the production function Y = K\sqrt { K } has 30% of output invested in new capital and 6% of the capital stock depreciated each year, what is the steady-state level of capital?


A) 3.24 units
B) 9 units
C) 25 units
D) 36 units

Correct Answer:

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